Scotiabank investment-banking profit rises 37 per cent to a record
Scotiabank beat its return target as BMO raised adjusted profit 19 per cent. In Australia, an unconfirmed takeover report lifted Suncorp and IAG shares by as much as 6 per cent.
Economics & Markets··Evening
Scotiabank's return on equity reaches 14.2 per cent
Scotiabank's third-quarter net income rose to 2,953 million dollars from 2,527 million dollars a year earlier. Adjusted return on equity climbed to 14.2 per cent from 12.4 per cent, clearing the bank's 14 per cent target. Global banking and markets profit reached a record 647 million dollars, up 37 per cent on capital-markets revenue and record underwriting and advisory fees. Wealth-management profit rose 23 per cent to 518 million dollars, while assets under management increased 16 per cent to 474 billion dollars. The provision for credit losses was 1,079 million dollars and the common equity tier one ratio was 13.1 per cent.[1]
BMO's adjusted and reported profit move in opposite directions
BMO's adjusted net income rose 19 per cent on the year to 2,859 million dollars in the third quarter, while adjusted earnings per share increased to 3.96 dollars from 3.23 dollars. Reported net income, however, fell to 1,750 million dollars from 2,330 million dollars, and reported earnings per share dropped to 2.38 dollars from 3.14 dollars. The provision for credit losses eased to 722 million dollars from 797 million dollars, while the common equity tier one ratio slipped to 13.0 per cent from 13.5 per cent. The bank raised its dividend 5 per cent and announced its intention to begin a buyback of up to 25 million shares.[2]
An unconfirmed takeover report lifts Australian insurers
Shares in Suncorp and Insurance Australia Group rose between 5 per cent and 6 per cent, leading the ASX 200. The move followed a Financial Times report that Tokio Marine had settled on Suncorp as its preferred takeover target. Tokio Marine did not respond to a request for comment, Suncorp and Insurance Australia Group declined to comment, and the report could not be independently confirmed. The newspaper's sources said the Japanese insurer had reviewed several targets in recent months, including Insurance Australia Group and Canada's Intact Financial Corp, while discussions remained under way and no deal was certain. The financials sub-index rose 0.9 per cent and the broader benchmark gained 0.6 per cent.[3]
